Credit Card Myths

It is already easy to get into credit card debt without myths to further drag you down. Credit card myths abound and are accepted by many as truth. Some of them can be pretty harmless but some can endanger not only your credit scoring but your finances as a whole.

Myth 1: You can buy anything you want.

Some credit card holders believe that if they have a card with supposedly no preset limits, they really can buy anything they want. However, all credit cards have limits. These limits just depend on your salary and the way you spend. So do not be surprised if after using your card on several high-priced items, you finally get your card rejected. Debunking the no-limit myth is important because it will prevent you from embarrassment and financial disaster.

Myth 2: You are required to present identification.

Unfortunately, not all stores require identification when accepting credit card payments. If someone can fake your signature, you are in deep trouble. Someone can use your credit card for a shopping spree, which is unfair especially if you are financially responsible. So be sure to keep your credit card safe at all times. Report its loss immediately.

Myth 3: Debit card use can affect credit card scoring.

Though you may be using your debit card responsibly, what you do to your credit card is a wholly separate matter. If you do not handle your credit card as responsibly as you do your debit card, do not expect a good credit card score.

Myth 4: Paying the minimum is sufficient.

Although paying the minimum can keep your creditors at bay, it will not bide well for your credit score and your overall financial standing. If you pay the minimum every month, you leave a balance each time that will add up to your total debt. The debt then increases. Take into consideration your credit card interest. Add them all up, so you can see why paying only the minimum is a definite no-no.